Portfolio

Phoenix Group makes offer for ReAssure, Berkeley interim profit takes a tumble

By Josh White

Date: Friday 06 Dec 2019

(Sharecast News) - London open

The FTSE 100 is expected to open 13 points higher on Friday, having closed down 0.7% at 7,137.85 on Thursday.
Stocks to watch

Phoenix Group Holdings said it had made a £3.2bn cash and shares offer for UK life insurance closed book consolidator ReAssure Group. The acquisition was forecast to generate extra cash flows of around £7bn over time, of which £2.7bn was expected to be generated between 2020 and 2023 and a further £4.3bn from 2024 onwards, Phoenix said on Friday. ReAssure is owned by Swiss Re Group and MS&AD Insurance Group Holdings.

Berkeley Group reported that interim profit before tax tumbled by 31% to £276.7m as revenue slid 44% to £930.9m. However, the property developer said the reduction had been anticipated and reflected the completion of several London-based developments acquired in the period from 2009 to 2013. The FTSE 100-listed company added that it had been a "good start to the year", leaving it on course to achieve its six year pre-tax profit target of £3.3bn.

Associated British Foods reiterated its outlook early in the new financial year on Friday, with AB Sugar set to "benefit materially" from the increase seen in EU sugar prices and further cost reduction. The FTSE 100 company's chairman, Michael McLintock, added that Primark was expected to continue the expansion of its selling space, and noted that its businesses had completed "all practical preparations" for Brexit. He said the firm still expected progress, on both a reported and an IFRS 16 adjusted basis, in adjusted earnings per share for the group for this financial year.

Newspaper round-up

The Eddie Stobart transport business, famed for its red and green lorries, is teetering on the brink of collapse with its future due to be decided at a key shareholder vote in London on Friday. The vote will pit William Stobart, the third son of the company's founder, against his childhood friend and former brother-in-law, Andrew Tinkler. - Guardian

More than 3,000 Uber passengers reported sexual assaults in 2018, the ride-sharing company revealed in its first-ever safety report on Friday. Nine passengers were murdered and 58 riders were killed in crashes last year, the report said. These incidents, which include 229 rapes, represent just a fraction of the more than 1.3bn rides Uber facilitated in the US in the past year, but they come at a time when the company is increasingly under scrutiny for worker and rider safety conditions. - Guardian

Emmanuel Macron faces his ordeal by fire. French trade unions, the professional guilds, and political populists of Left and Right have combined to defeat his landmark reform of France's exorbitant pension system. It is a test of whether the sacred modèle français can be made fit for the 21st Century, and whether France's surging public debt ratio can be brought under control. A heroic attempt to tackle this rogue beast under the Chirac-Juppe government in 1995 ended in failure after three weeks of havoc. - Telegraph

More than £5,000 a second was withdrawn from British property funds in a year because of uncertainty over Brexit and high street woes. Between October 2018 and October this year, a net £2.97 billion was taken from 15 open-ended funds that offer daily liquidity to investors, analysis by Morningstar, the data firm, shows. - The Times

Saudi Aramco has priced its initial public offering at the top end of its range in what will be the world's largest new listing to date. The state-owned energy group will price its shares at 32 riyals - or about 648p - per share, the higher end of its indicative range, according to sources familiar with the decision, and set to raise $25.6 billion. This would beat the previous $25 billion record set in 2014 by Alibaba, the Chinese ecommerce company. - The Times

US close

Wall Street trading finished positive on Thursday, as financial markets shrugged off the latest concerns around US-China trade relations, as well as ongoing impeachment proceedings against president Donald Trump.

The Dow Jones Industrial Average ended the session up 0.1% at 27,677.79, the S&P 500 added 0.15% to 3,117.43, and the Nasdaq Composite was 0.05% firmer at 8,570.70.

At the open, the Dow had dropped 61.37 points after seeing out the previous session higher, amid reports that a trade deal between the US and China could be closer than thought earlier in the week.

Market participants were keeping a keen eye on global trade developments yet again on Thursday following news that Beijing and Washington were on the cusp of inking a "phase one" trade deal.

On Wednesday, Donald Trump had said that as far as he was concerned trade talks with China were going "very well", although on Tuesday, top officials from the US administration once again threatened to institute tariffs on another $156bn-worth of Chinese goods on 15 December if a trade agreement was not reached.

For its part, China reiterated a call for existing tariffs to be lowered if the crucial talks between Beijing and Washington were to continue.

Overnight, a Chinese Ministry of Commerce spokesman told reporters: "The Chinese side believes that if the two sides reach a phase one deal, tariffs should be lowered accordingly."

The spokesman added that both sides continued to be in close communication, but did not expand further.

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